Which of the following is a risk associated with complex financial instruments?
A)Management's objectives in entering into such transactions may relate to misstating the financial statements.
B)Management and/or those charged with corporate governance may lack experience with complex financial instruments.
C)Management may enter into such transactions without proper oversight from those charged with corporate governance.
D)All of the above are risks.

Question

Quizplus · Accepted Answer

All of the choices are risks associated with complex financial instruments. Management may enter into such transactions with the intention of manipulating financial statements, may lack experience with these instruments thus increasing the risk of errors or misjudgments, and may operate without proper oversight from those charged with corporate governance.

Which of the Following Is a Risk Associated with Complex